Hospitals agree to drop part of suit against New Hampshire over Medicaid

Ten hospitals that were suing the state of New Hampshire agreed to drop most of their claims in documents filed in federal court Wednesday.

Dartmouth-Hitchcock Medical Center, Elliot Hospital and Catholic Medical Center in Manchester and seven other large hospitals in New Hampshire filed the suit in 2011 over what they said is an unfair system for reimbursing hospitals that provide care to the poor.

The suit questioned whether lawmakers could keep the millions raised annually in so-called bed-tax payments that hospitals make so the federal government will make a matching payment. Since 1991, hospitals have been reimbursed once the state received the federal payment, but in 2011, state budget writers decided to keep not only the federal money, but also the initial $115 million it planned to collect from the hospitals.

In May, Senior Assistant Attorney General Nancy Smith argued that prolonging the dispute could affect important decisions over New Hampshire’s Medicaid program being debated this spring in the state’s budget process.

Smith yesterday limited her comments on the dismissal because of other pending litigation.

Six of the hospitals have filed two new lawsuits alleging other violations not resolved by this dismissal.

“Some of the issues that they raised have been subsequently resolved. That lawsuit is over, but they still have some issues that they have brought into other lawsuits . . . more technical issues about notice regarding the 2008 rate changes,” she said.

Hospital officials couldn’t be reached for comment yesterday.

(Sarah Palermo can be reached at 369-3322 or spalermo@cmonitor.com or on Twitter @SPalermoNews.)

The issue of Medicaid disproportionate share hospital (DSH) payments is not going away. Under the ACA, there are $26.1 billion in DSH cuts scheduled between FY2014 and FY2022. In FY2012, New Hampshire hospitals received $164 million in DSH payments for Medicaid, out of $11 billion nationally. The cuts will hit states whether they expand Medicaid, or not, but states that do the expansion will receive federal subsidies for Medicaid that will compensate somewhat for the cuts.
http://www.fas.org/sgp/crs/misc/R42865.pdf

The joint fiscal committee approved New Hampshire’s planned application for expanding Medicaid yesterday. The federal Centers for Medicare and Medicaid Services must approve the proposal, which would extend …